Comment to article 218. Division of shared property and allocation of shares from it  The Civil Code of the Republic of Kazakhstan  

The commented article distinguishes between the division and allocation of property in common shared ownership. Upon division, the right of common ownership is terminated for all shared property. Upon allocation of a share, the right of shared ownership is terminated for the allocated or allocated parts, if the allocation of parts occurs in kind. If the participants in common joint ownership compensate the allocated participant for his share in the right of shared ownership in monetary or other form without allocating a share in kind, then the shares in the right of common ownership of its remaining participants are redistributed, and the right of the allocated participant to a share in the right of common ownership is terminated.

The division of property held in shared ownership by virtue of paragraph 1 of the commented article may occur only by agreement of the participants in shared ownership. The commented article does not provide for the division of shared ownership in court. Therefore, by virtue of paragraph 3 of the commented article, if the participants in shared ownership fail to reach an agreement on the method and conditions of dividing common property, the participant or participants in joint ownership have the right to demand the allocation of their share (shares). Allocation of shares in property that is jointly owned can occur both on the basis of an agreement between all owners, and in court if an agreement is not reached between them.

The concepts of division and allocation of shared-ownership property are relative. If the property on the right of shared ownership is held by two participants, then both the division and the separation of property from shared ownership lead to the termination of the right of common ownership. Shared ownership is also terminated when the allocation of shares occurs at the request of several participants, even if one remaining participant does not agree to the division of shared ownership or has not demanded the allocation of his share.

The commented article (paragraphs 2 and 3) provides for the possibility of demands for the allocation of a share from the common property, but not the allocation of a part of the share. Therefore, the requirement to forcibly allocate a part, rather than the entire share, of the common property is unacceptable.

In the case of division and allocation of shared property, each of the divided or separated participants in shared ownership, in return for a share in the right of common ownership, acquires ownership of a specific property from the common property or compensation for the value of this share.

The size of the share in the property in value terms during the division and allocation of shares in the property, which is common property, is proportional to the size of the shares of participants in the right of shared ownership.

According to the general rule of paragraph 3 of the commented article, participants in shared ownership have the right to demand the allocation of their share in common ownership in kind.

However, there may be cases when the allocation of property in kind from the property owned jointly is not allowed by legislative acts or is impossible without disproportionate damage to the property.  

As an example of a legislative prohibition on allocating a share of common property in kind, one can point to paragraph 3 of Article 31 of the Law on Housing Relations, according to which the share of each owner in the common property in a condominium is inseparable from his separate (individual) ownership. Allocation of a share in kind without disproportionate damage to property is usually impossible in indivisible things (see art. 120 CC).  

If it is impossible to allocate a share in common ownership in kind, paragraph 3 of the commented article establishes a rule according to which the allocated owner has the right to pay the value of his share by other participants in shared ownership. Such payment by agreement of the participants in shared ownership can be made by all participants in shared ownership, as well as by some of them with appropriate changes in the size of shares in the right of common ownership. If the participants in the common ownership refuse to pay the value of the share to the separating participant or if there is no agreement between the co-owners on the amount and procedure for paying the value of the share, the dispute between them may be resolved in court.  

In cases where the allocation of a share in kind without causing disproportionate damage to common property is possible, the replacement of this allocation with monetary or other compensation is permissible, as a rule, with the consent of the co-owner requesting the allocation of the share. Without the consent of this owner, according to a court decision, compensation can be paid if there are three conditions: the insignificance of the owner's share requiring allocation; the impossibility of its actual allocation; the absence of a significant interest in obtaining a share in kind (paragraph 4 of the commented article).

If it is impossible to allocate in kind a share in the property commensurate with the share in the share ownership of the participant requesting the allocation, then this disproportionality, in accordance with paragraph 4 of the commented article, is eliminated by paying him either the appropriate amount of money or other compensation in addition to the share allocated in kind.

Paragraph 6 of the commented article establishes an exception to the procedure for allocating a share provided for in paragraphs 3-5. If the allocation of a share turns out to be clearly impractical, for example, due to the indivisibility of common property in kind and the unwillingness or lack of real opportunities for owners to pay the value of this share to a participant in shared ownership who requires the allocation of a share, the court has the right to decide on the sale of all common property at public auction. At the same time, the proceeds from the auction are distributed among the participants in the common ownership in proportion to their shares.

The specifics of the procedure for allocating a share in joint ownership at the request of a co-owner's creditor are defined in art. 222 of the Civil Code.

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The commentary was prepared within the framework of the scientific and practical research program of the Scientific Research Center of Private Law of the Kazakh State Law University.  

Head of the working group on the preparation of the draft Civil Code of the Republic of Kazakhstan, Corresponding Member of the Academy of Sciences of the Republic of Kazakhstan, Professor Suleimenov M.K.

Deputy head Professor Basin Yu.G.